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HSBC cuts passive charges in half

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HSBC Asset Management has become the latest manager to cut its passive charges, slashing the cost of some of its index trackers by more than half.

The manager’s FTSE All-Share Index Fund now costs 0.07 per cent, down from 0.17 per cent. The cost reduction makes it cheaper than Vanguard’s cheapest passive fund – the FTSE UK All Share Index Unit Trust, which charges 0.08 per cent.

The asset manager has cut the ongoing charge on its American and European funds too. The American Index Fund charges have been reduced from 0.18 per cent to 0.08 per cent and the European Index Fund from 0.2 per cent to 0.1 per cent.

The new charges will apply to both new and existing customers.

“Passive investing is a big and expanding market in the UK and as a fund provider we are committed to playing a part in this expansion,” says Andy Clark, chief executive at HSBC Global Asset Management UK.

HSBC’s move follows a number of cuts from Vanguard, BlackRock and Fidelity in the latest passive price war.

Hargreaves Landsdown head of passive investments Adam Laird has previously criticised managers for charging above the odds for their funds.

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  1. There are other important things to consider for passives than price, though. Stock lending policies, tracking error, replication methodology etc. As in most cases, price only tells some of the story.

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